E race scam: Cabinet gives nod for probe

Hyderabad: The state Cabinet on Monday directed Chief Secretary A. Santhi Kumari to write to the Anti-Corruption Bureau (ACB) director-general to initiate a probe against BRS working president K.T. Rama Rao in connection with alleged irregularities amounting to Rs.55 crore in the Formula E car race held in Hyderabad.

The Chief Secretary is expected to write to the ACB director-general on Tuesday, following which a case will be registered against Rama Rao, and summons will be issued to him seeking his appearance before the ACB for an inquiry into alleged financial irregularities in the Formula E race scam.

This development follows Governor Jishnu Dev Varma’s approval on December 12 to prosecute Rama Rao. The state government had sought his permission on November 8.

The decision to prosecute Rama Rao was taken by the state Cabinet, chaired by Chief Minister A. Revanth Reddy, which met on Monday in the Committee Hall of the Legislative Assembly.

In an informal chat with media persons after the Cabinet meeting, minister for revenue and I&PR Ponguleti Srinivas Reddy said the Cabinet extensively discussed the Formula E race scam and the Governor’s nod for the inquiry against Rama Rao.

Srinivas Reddy revealed that the allegations include the illegal transfer of Rs.55 crore from the Hyderabad Metropolitan Development Authority (HMDA) funds to the Formula E race organisers without seeking requisite approvals from the state government or competent authorities.

The minister added that the state government had already approved ACB inquiry into the role of then MAUD secretary Arvind Kumar, who transferred the funds on the oral instructions of then municipal administration and urban development (MAUD) minister Rama Rao.

“Since the Governor has given his nod, the State Cabinet directed the Chief Secretary to write to the ACB immediately to initiate the inquiry against K.T. Rama Rao in the Formula E race case,” Srinivas Reddy said.

He added that the ACB is expected to serve notices to organisations linked to the Formula E race, including Greenko, Ace Nxt Gen, Mahindra Racing, and Jaguar TCS Racing.

Srinivas Reddy clarified that the state government does not hold any personal grudge against anyone and emphasised that “the law will take its own course” in the matter.

Responding to threats by some BRS leaders, who claimed that Telangana would become an 'agnigundam' (fire pit) if Rama Rao is arrested, Ponguleti remarked, “This shows their arrogance. How can a state become an agnigundam if someone is arrested?”

The Formula E car race was organised during the tenure of the previous BRS government with a reported investment of `200 crore in February 2023. After the Congress government assumed office in December 2023, allegations of financial misappropriation surfaced. The MAUD department lodged complaints with the ACB, highlighting large-scale fund mismanagement.

The ACB’s request for investigation included then MAUD secretary Arvind Kumar and a former chief engineer in the HMDA. While the state government approved an inquiry against these officials, the request concerning Rama Rao, as a public representative, was referred to the Governor for sanction.

Revanth Reddy has reiterated the government’s commitment to ensuring a thorough and legally sound investigation. “Since the courts have mandated prior sanction from the Governor to proceed against public representatives, we wanted to ensure the investigation adheres to legal scrutiny,” sources said.

According to the MAUD complaint, Arvind Kumar, in his capacity as HMDA commissioner, authorised the `55 crore payment to Formula E Operations (FEO) without statutory approval.

The file notes reportedly indicated that Arvind Kumar acted on oral instructions from Rama Rao.

In a recent statement, Rama Rao admitted to issuing these instructions but defended the decision as a move to promote Hyderabad’s global image. However, officials contend that this action violated established financial regulations.

Allegations surfaced regarding a second agreement signed in October 2023 to host another Formula E race in February 2024. This agreement reportedly bypassed approvals from the Election Commission and the finance department, thereby breaching the election-related Model Code of Conduct (MCC).

The state Cabinet also approved the new Revenue Act (Record of Rights – RoR Act) during the meeting. Ponguleti announced that the state government would introduce the Bill on the new RoR Act in the ongoing winter session of the Legislative Assembly.